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How crypto crackdowns could end the GPU shortage this year

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How crypto crackdowns could end the GPU shortage this year

For several months, any news about the GPU market had been bad news. But that’s starting to change. Thanks to China’s recent restrictions on cryptocurrency mining, graphics cards are flooding the secondhand market in China for ludicrously low prices. Some cards are even selling below the suggested price.

Chinese miners comprise the majority of miners around the world, and the country’s recent restrictions have pushed them out of the market. China has banned crypto-mining in certain regions to combat money laundering and payments for illegal activity. The price of Bitcoin and Ethereum sank shortly after the restrictions were put in place, causing large mining farms to quickly sell off their assets.

Graphics cards in a crypto mining farm.
NurPhoto/Getty Images

Reports show that mining farms are looking to offload their cards before the prices sink even more. Some RTX 3060 models are selling for as little as 2,200 yuan, or about $340. For context, RTX 3060 models were selling for above $1,100 in parts of Europe only a few months ago.

The exodus of cards from mining farms is good news for the GPU market, but that doesn’t mean you should try to snag a card from China. Most sellers are offloading cards in bulk through in-person transactions. Plus, it’s important to remember that these cards have likely been operating at full capacity for months or even years, so they wouldn’t make a good addition to your next gaming build.

If anything, the news shows that demand for graphics cards, particularly from crypto-miners, is dropping. Changes to Ethereum, a popular Bitcoin alternative, could further reduce demand over the next year.

There are five updates coming to Ethereum over the next several months that would essentially remove graphics cards from the cryptocurrency equation. Coindesk points out two Ethereum Improvement Proposals (EIPs) that will make the biggest difference in 2021.

Ethereum coins sitting on a desk.
Steven Heap/123RF

The first is EIP 1559, which changes how transaction fees work with Ethereum. Miners now bid on transactions, which requires a complex fee estimation algorithm. According to the Ethereum Foundation, “these algorithms often end up not working very well, leading to frequent fee overpayment.” This proposal changes fees to a fixed price, which would decrease revenue for miners.

The goa is to make Ethereum less volatile. It would not only change the transaction fee payout, but also avoid the possibility of mining without a reward.

The other proposal is EIP 3554, which is the famous (or infamous, depending on your stance) move to Ethereum 2.0. It moves Ethereum from a proof-of-work model to a proof-of-stake model. Without getting too deep in the crypto weeds, the new model requires less power from graphics cards because the network itself can verify transactions based on a miner’s stake in Ethereum. When it rolls out on December 1, the change will essentially make graphics card mining obsolete.

Small changes around the world are helping to end the GPU shortage, directly and indirectly. Although we still have many months before things return to normal, news of falling GPU prices and changes to Ethereum show that there’s light at the end of the tunnel.

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El Salvador, the first country to mine Bitcoin using volcanoes

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El Salvador, the first country to mine Bitcoin using volcanoes

El Salvador, the first country to make bitcoin legal tender, has officially mined the first bitcoin using volcanic energy. This was revealed when President Nayib Bukele shared a screenshot of a mined bitcoin on Twitter. 

We’re still testing and installing, but this is officially the fist Bitcoin mining from the volcanode – tweeted Bukele.  Almost 22% of the country’s power market is geothermal.

El Salvador, the first country to mine Bitcoin using volcanoes 17

Following the approval by El Salvador’s congress, the Bitcoin price surged to $48,000 earlier today. This surge in prices was seen after $241 million in Bitcoin shorts were liquidated according to bybt.com

The country has mined 0.0059 BTC so far, worth $260 using geothermal energy from volcanoes. 

Further to this, El Salvador became the first country to make bitcoin legal tender last month. It has also created the Chivo wallet for citizens to access the Bitcoin network and make payments. As an incentive, the government gave out $30 to anyone who signed up.

El Salvador’s harnessing of geothermal energy could provide an answer to the hunt for a reliable clean energy source to power bitcoin mining.

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Bitcoin mining company buys Pennsylvania power plant to meet electricity needs

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Bitcoin mining company buys Pennsylvania power plant to meet electricity needs

What just happened? Crypto mining companies are continuing to find innovative solutions to power problems despite concerns regarding Bitcoin mining’s immense power requirements and ecological impacts. A holding company in Pennsylvania recently purchased the financially challenged Scrubgrass power plant. The plant currently produces enough power for 1,800 Bitcoin miners, with output increases planned to support more than 20,000 miners by 2022.

Mining the top cryptocurrencies such as Bitcoin or Ethereum requires vast amounts of power. A single Bitcoin transaction, including the resources needed to mine the coin and to verify the transaction, can total upwards of 1,700 kilowatt hours (kWh). This ever-increasing power demand has forced large crypto mining outfits to leverage any available means to produce their power at the lowest possible cost. In some cases, this leads to mining operations literally taking power production into their own hands.

Stronghold Digital Mining in Kennerdell, Pennsylvania, has joined the ranks of those mining operations that have sought to solve their power delivery challenges themselves. Unlike those companies that leverage regional hydroelectric power or others leveraging energy credits and payments from their respective states, Stronghold recently purchased the Scrubgrass power plant in Venango County, Pennsylvania. According to Stronghold, who advertises their organization as an “environmentally beneficial and vertically integrated Bitcoin miner,” the plant will burn Pennsylvania’s waste coal to power on-site mining hardware located in shipping containers next to the plant. Waste coal is the residual material left over following coal mining operations; it can be particularly harmful to the environment by leaching metals such as aluminum, iron, and manganese into the soil and surrounding water sources.

Stronghold plans to claim and burn waste coal, then deliver the previously contaminated reclaimed land back to the state via the Pennsylvania Department of Environmental Protection (DEP). Current DEP statistics claim that so far, Stronghold has helped to reclaim more than 1,000 acres of Pennsylvania land. Despite the ability to burn the waste and minimize the threat of contamination, the waste coal still produces a significant amount of carbon dioxide. These types of emissions are an ongoing concern to environmental watchdog groups monitoring Bitcoin’s energy and pollution footprint.

Unlike Ethereum mining, which utilizes traditional graphics processing units (GPUs), Bitcoin mining relies on specialized hardware known as application-specific integrated circuits (ASICs). While GPUs can be repurposed for anything from mining other algorithms to performing their intended rendering tasks, Bitcoin ASICs are purpose-built devices designed solely to provide the hash power required to mine against Bitcoin’s SHA-256 algorithm.

Image credit: Coal plant from Rice University, Scrubgrass plant from bitcoin.com

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China name-checks Bitcoin, Ethereum, TEDA in blanket crypto ban

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China name-checks Bitcoin, Ethereum, TEDA in blanket crypto ban

The People’s Bank of China just released a note that effectively outlawed cryptocurrency in China. This note was issued to “the people’s governments of all provinces, autonomous regions, and municipalities under the Central Government, and Xinjiang Production and Construction Corps. That’s basically everyone in China – every Chinese citizen, anyway. They’re targeting what they’re called “virtual currency trading hype activities” of all sorts.

Per the release today, the People’s Bank of China is concerned that virtual currency trading hype activities are “disrupting the economic and financial order.” They’ve also claimed that this virtual currency trading is “breeding illegal and criminal activities” such as:


• Fraud


• Illegal fund-raising


• Gambling


• Money laundering


• Pyramid schemes


• Endangering the safety of people’s property

China’s release points specifically to “virtual currencies such as Bitcoin, Ethereum and TEDA.”

Part of the plan to remove the threat from China includes the banning of certain phrases in the names of registered market entities. The registered names and business scope of enterprises and individual industrial and commercial houesholds “must not contain words or content” such as:

• virtual currency


• virtual assets


• encrypted currencies


• encrypted assets

The release today from the Chinese government included several new rules and clarifications for entities inside China. “Virtual currency-related business activities are illegal financial activities,” makes clear that no person or business within China can conduct business with virtual currency of any sort.

The new rule set also included “the provision of services by overseas virtual currency exchanges to Chinese residents through the Internet” as an illegal financial activity. They also made clear that any legal person, unincorporated organization, or natural person who invests in virtual currency will be subject to the loss of said currency, as “the relevant civil legal acts are invalid.”

It is not clear how Chinese officials plan on enforcing the “loss” of said data. They did suggest that the proper authorities will “promptly shut down” all “internet applications such as websites, mobile applications, and small programs that carry out virtual currency-related business activities.” That bit is aimed at crypto mining, transfer, and payments.

This is the most massive and direct action the Chinese government has taken against cryptocurrency. It’ll be interesting to see how the market reacts, given past jumps and falls of crypto value when major government actions like these have occurred.

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